Volatility Box – October 21, 2019
Announcements & Trades
Over the weekend, we announced that we had added one additional futures ticker to our Volatility Box:
Copper Futures – /HG on ThinkOrSwim
On days like today, where the indices are rather quiet, copper offers us another market where we can look at for opportunity.
It’s proven to be more volatile on days when the indices have chopped sideways. Copper also offers us a contract with a lower margin requirement than the indices; however, it does lack any sort of micro-futures contract… at least at the moment.
Some additional announcements for members:
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- Double-check Volatility Box code header to ensure you have the correct version. You should see the dates dates 10/20 – 10/27.
- If you have extended hours turned off, make sure to also have the option “Start aggregations at market open” turned off.
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If you’d like to learn how to do any of the above, we go over it in tonight’s video. Since today was a quieter day in the markets, we didn’t have any Volatility Box setups.
We had a total of 0 trades that set up today, for a net P/L of +$0.
Breaking Down AMTD Earnings
For tomorrow, we have quite a few companies reporting earnings, both before and after the close.
As of right now, the only company with conditions that may trigger is AMTD (TD Ameritrade). AMTD had actual earnings of $1.05 compared to estimates of $0.982. For our conditions, that’s an earnings beat.
Using that information, we check to see what are good strategies when we have an earnings beat:
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- 100% (2/2) on gapping down, and filling that gap, with an earnings beat
- 25% (1/4) on gapping up, and continuing to go higher (gap n go, with an earnings beat
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Using that information, we can set our bias. We would like to see AMTD gap down, and then look to play a fill of that gap.
Also, as an FYI – according to our calculations for the expected move, AMTD is expected to move +/- $2.55 after earnings. There’s been only one time in the past two years where AMTD’s actual move was greater than the expected move — April 2018.
And we had a bearish Gap n Go at the time – also happened to be an earnings miss. Interesting to note, but doesn’t affect our trade plan this time around, given that AMTD had a beat. It does, however, help us understand AMTD’s earning personality.
Earnings Corner
Below is a table with the list of other upcoming earnings:
[su_table responsive=”no” alternate=”no” fixed=”no” class=””]| Ticker | Preference | Bias | Earnings | Lowest $ Move | Avg $ Move |
| CDNS | Gap N Go | Bullish | Beat | $ 0.25 | $ 1.34 |
| SAP | Gap N Go | Bearish | – | $ 1.15 | $ 1.81 |
| AMTD | Gap N Go | Bearish | Miss | $ 0.34 | $ 0.84 |
| AMTD | Gap Down Fill | Bullish | Beat | – | – |
| ZION | Gap Down | Bullish | Beat | – | – |
| CIT | Gap Fill | – | – | – | – |
| PG | Gap N Go | Bullish | Beat | $ 1.94 | $ 2.36 |
| PG | Gap N Go | Bearish | Miss | $ 1.19 | $ 1.43 |
| UPS | Gap N Go | Bullish | Beat | $ 2.50 | $ 3.74 |
| UPS | Gap N Go | Bearish | Miss | $ 1.15 | $ 3.38 |
| SKX | Gap N Go | Bullish | Beat | $ 0.35 | $ 1.22 |
| SKX | Gap N Go | Bearish | Miss | $ – | $ 0.74 |
| LMT | Gap Fill | Bearish | – | – | – |
Resources:
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